6
2002
annual
report
Letter from the CEO
completed to augment credit lines already in place. At the end of the year the company had no short-term borrowings and total unused bank lines of $879 million, providing, with cash on hand, a financing capacity of almost $1 billion.
The increase in China’s manufacturing capability and its investment in infrastructure are having a similar impact on other base metals, including copper, and thus the prospects for the company’s base metal interests are improving.
OBJECTIVES
The price of gold in 2003 is expected to exceed last year’s average price of US$310. The market for coking coal appears to be balanced despite some current surplus inventory and significant price changes are not expected. The company’s coal sales are forecast to increase by 50% as a consequence of the Fording transaction, despite the closure
Teck Cominco’s objectives for 2003 are shown on page 9. The most immediate objective will be the successful integration of the metallurgical coal operations and the employees of Fording, Luscar and Teck Cominco into the new Coal Partnership. The performance of the company in the achievement of its 2002 objectives is shown on page 8. I would like to thank all our employees for the progress they have made in attaining these objectives. OUTLOOK
The rapidly growing importance of China as a producer and consumer of metals and minerals will be a significant future influence on the world mining industry. China’s exports of zinc metal and zinc concentrate had grown to 10% of Western World demand in 1999. In the second half of 2002, as a result of a major increase in China’s zinc refining capacity, its imports of zinc in concentrate have exceeded its exports of zinc metal. In four years China has changed from the world’s largest exporter to a net importer of zinc. If China’s domestic demand continues to grow at the rate seen in recent years, exports of zinc metal will continue to decline. China’s appetite for zinc in concentrate to feed its refining industry has already led to an unprecedented tightness in the world concentrate market. These two developments should eventually lead to a fundamental improvement in the supply and demand balance for zinc and for its price.
of Bullmoose. The outlook for 2003 is for an increase in the company’s after-tax earnings and cash flow. In conclusion, I would like to express my appreciation to Mick Henningson, Senior Vice President, Mining, who is retiring after 37 years’ service with the company, and to Klaus Zeitler, who retired in November having served as a non-executive director of both Teck Corporation and Cominco Ltd. prior to joining Teck as Senior Vice President in 1996.
DAVID A. THOMPSON Deputy Chairman and Chief Executive Officer February 20, 2003